Further details about government requirements are contained in subsequent sections and in the individual profiles of leading funds (see Appendix).
With the exception of the Fonds de solidarité, labour-sponsored funds have not been around long enough to determine an investment record for which they may be properly assessed. Indeed, like the Fonds de solidarité, most funds have expended energy and resources in the early years in capitalizing and gaining a foothold in an unfamiliar financial environment. This point notwithstanding, there have been several recent attempts at the federal level to review and evaluate the leading funds. In part, these took place because of calls from different quarters for a more regular review of the performance - and performance specifications - of labour-sponsored funds in light of combined monetary incentives.
For instance, in 1994, the federal Standing Committee on Industry examined the funds and, in particular, the activities of the Fonds de solidarité and Working Ventures, in the context of a number of issues regarding current capital supply and demand trends. Based on its deliberations, the Standing Committee proposed a measure to match the annual capital raising of the funds with investment records of kinds of financings deemed to be in the public interest. This was intended as a self-regulating mechanism, subject to a yearly audit and is not dissimilar to some existing provisions.Endnote 9
The federal Auditor General made the same argument, noting that incentives should be more closely tied to specific performance criteria and targets. It is important to mention that this view is consistent with the general critique made by the Auditor General about all federal direct and indirect expenditure programs, both personal and corporate.
Concern has also been expressed about how some new labour-sponsored funds have departed from the concept as originally envisioned and enacted. Recently, the head of the Ontario Securities Commission criticized several provincial funds that may be diluting the control of union sponsors (see Section iv below). This concern is associated with a growing practice among some funds to pay fees or a percentage of income to sponsors as a substitute for their involvement.Endnote 10
Directors of leading labour-sponsored funds have articulated similar disapproval and have further argued that all funds should observe distinct benchmark standards - for example, on union control/influence and employment objectives - considering the degree to which they rely on public dollar infusions.
As they evolve, labour-sponsored funds will doubtless be subject to increased government scrutiny. Whatever major changes to statutory regimes such scrutiny brings cannot be unilateral at this juncture but must be co-ordinated between provincial and federal jurisdictions.